New Guidance from CMS on Sequestration Impact

Posted March 11, 2013

The Centers for Medicare and Medicaid Services has made available new information on the impact of sequestration’s mandatory federal reductions in spending for health care professionals, providers and supplies.

The agency states that Medicare fee-for-service claims with service or discharge dates on or after April 1, 2013, will incur a 2 percent reduction in payment. Reimbursement for claims of durable medical equipment and supplies, including those under the DME Competitive Bidding program, will also be reduced by 2 percent.

CMS states that while beneficiary payments for deductibles and coinsurance are not subject to the 2 percent payment reduction, Medicare’s payment to beneficiaries for unassigned claims is subject to the 2 percent reduction. Unassigned claims, are ones in which the provider does not agree to accept Medicare’s allowed amount as payment in full.  In this case providers may bill the patient up to 115 percent of the Medicare allowed amount; the patient must pay both the additional amount billed and their regular 20 percent co-payment.

CMS encourages Medicare physicians, practitioners, and suppliers who bill claims on an unassigned basis to discuss with beneficiaries the impact of sequestration on Medicare’s reimbursement.

Questions about reimbursement should be directed to your Medicare claims administration contractor. CMS remains hopeful that Congress will take action to eliminate the mandatory payment reductions.

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